TrackX Reports Q2 2021 Financial Results

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DENVER, June 01, 2021 (GLOBE NEWSWIRE) — TrackX Holdings Inc. (TSX.V:TKX | FRANKFURT:3TH) (“TrackX” or the “Company), a Software-as-a-Service (SaaS)-based enterprise asset management and supply chain solutions provider, announces the financial and operational highlights from its second quarter ended March 31, 2021. All results are reported in Canadian dollars unless otherwise specified. A complete set of the March 31, 2021 Consolidated Financial Statements and Management’s Discussion & Analysis has been filed on SEDAR (www.sedar.com).

“Over a year ago, TrackX made a strategic decision to sell its Yard Management line of business to FourKites in order to focus its efforts on responding to increased demand for supply chain tracing, tracking and sustainability solutions,” said Tim Harvie, TrackX CEO. “The Company’s enterprise scalable, IoT-enabled platform and experience is now being leveraged to support this larger supply chain opportunity with high margin, repeatable, partner friendly SaaS solutions. In today’s world, companies will have to become more adaptable, flexible and responsive to supply chain disruptions. Enterprises will have to invest in new and innovative technologies in order to:

  • Meet increased regulatory and compliance mandates in industries such as food services
  • Respond to increased consumer demand for proof of environmental, social and governance (ESG) behaviors
  • Achieve their sustainability initiatives 
  • Improve collaboration, transparency and trust throughout the partner ecosystem
  • Gain increased supply chain visibility and operational efficiency

To successfully take advantage of this opportunity, in Q2, 2021, TrackX announced a non-brokered private placement which was completed in Q3, 2021. With this financing, the Company is investing in additional sales, marketing and engineering resources to support both new and existing customer implementations and deliver an expanded set of SaaS-based supply chain tracing, tracking and sustainability solutions to meet customer demand for proof of ESG (Environmental, Social and Governance) claims. To further drive efficiency and reduce cost, In Q2,2021, TrackX also successfully consolidated its California office into the Denver head office.  

COVID has certainly had an impact on businesses around the globe, including TrackX. In Q2, 2021, TrackX saw a decrease in revenue over the same period a year ago.  This was largely attributable to the following factors:

  • The sale of the yard management business to FourKites which occurred in late Q2, 2020;
  • The completion of the transition services agreement with FourKites in December, 2020;  
  • A large automotive customer moved its requirements in-house in late 2020 and;
  • Solution implementation delays were incurred with both new and existing customers, which TrackX anticipates will proceed as customers recover from the disruptions caused by COVID.”

Financial Highlights for the three months ended March 31, 2021 (“Q2 2021”)

  • Net loss for the second quarter was $0.503 million or ($0.02)/share compared to a net income of $0.333 million or $0.00/share)for the three months ended December 31, 2020 (“Q1 2021”). In Q1 2021, TrackX completed the transition services related the sale of the Yard Management business to FourKites and, as such, there was no revenue related to transitional services in Q2 2021.
  • Adjusted EBITDA loss for Q2 2021 was $0.387 million compared to a $0.163 million income for Q1 2021.  This decrease was largely due to the reduction in implementation and other services revenue resulting from the completion of the transition services agreement with FourKites in Q1 2021.
  • Recurring revenue of $0.169 million, a 15% decrease over $0.198 million for Q1 2021, due to a reclassification of revenue with a large insurance company in Q1 2021.
  • TrackX announced a non-brokered private placement of up to $2,000,000 which was subsequently completed in Q3 2021.

Second Quarter Revenue Mix

Revenue Q2 21 Q1 21
Recurring and Software License 39% 22%
Hardware 6% 2%
Setup, implementation, and other fees 55% 76%
TOTAL 100% 100%

Highlights Subsequent to the Second Quarter

  • TrackX announced the completion of a non-brokered private placement of 40,000,000 units of the Company (the “Units”) at a price of $0.05 per Unit for gross proceeds of up to $2,000,000 (the “Offering”). Each Unit consists of one common share of the Company (a “Share”) and one common share purchase warrant (a “Warrant”). Each Warrant entitles the holder thereof to purchase one additional Share of the Company at an exercise price of $0.075 at any time within 24 months of the closing of the Offering. 
  • TrackX announced that it hired Michael Himmelfarb as Chief Marketing Officer of TrackX, with an extensive background and recent experience in sustainability and blockchain’s distributed ledger technologies to establish TrackX as a leading provider of supply chain execution and sustainability solutions.          

Selected Financial Information

C$(000s) (except per share) Three-month
  Q2 2021
Q1 2021
Revenue $428 $884
Gross Margin %  18%  77%
Income (loss) for the period ($503) $333
Loss per share ($0.02) $0.00
Adjusted EBITDA Income (Loss)* ($0.387) $0.163

Business Outlook

TrackX’s recent shift in focus on the delivery of higher-margin, repeatable, supply chain tracing, tracking, execution and sustainability solutions coincides with customers accelerating their digital transformation efforts by investing in technologies to:

  • Rapidly innovate, adapt and respond to disruptions like those we have experienced as a result of the most recent pandemic.
  • Respond to increased consumer demand for transparency on product origin, processing, environmental footprint and sustainable practices.
  • Achieve their Environment, Social and Governance (ESG) initiatives.  Increased regulatory and ESG compliance mandates are creating new demands on the supply chain that are resource intensive and often difficult to achieve and prove.
  • Capture real-time, IoT-driven, reliable, granular data, feeding predictive analytics and artificial intelligence in order drive operational efficiency and improve collaboration across the entire partner ecosystem.             

TrackX will continue to strengthen its team and to make enhancements to its core technology platform to support its new strategy. It will be rebranding its GAME platform as Keychain to signify the Company’s shift in focus and new capabilities in support of tracing, tracking, sustainability solutions. TrackX is positioning Keychain as the  “key” to digital supply ”chain” transformation for enterprise accounts. It will further leverage technologies such as blockchain, graph databases, enhanced workflows and machine learning.  While GAME has been focused on supporting the asset management requirements of a single enterprise, Keychain will leverage and expand upon its current technology offerings to address the supply chain tracing, tracking, compliance reporting and sustainability requirements of the total supply chain partner ecosystem. It will strive to:

  • provide a platform that helps customers accelerate their digital transformation;
  • continue to add features and functions to effectively meet market demand for supply chain efficiency, transparency and collaboration;
  • deliver applications that enable customers to activate ESG activity and respond to stakeholders’ sustainability demands; and
  • make it easier for customers and partners to invest in, deploy, and expand their TrackX relationship.

Among the enhanced solution capabilities that TrackX will be releasing are:

  • TrackX Control Tower, a web and mobile based business intelligence platform that customers use to drive efficiency and overall performance. Control Tower aggregates the enterprise’s IoT event-driven data and applies machine learning and AI to identify issues and opportunities more quickly. Customers can reach a whole new level of business process automation with greater responsiveness, flexibility, and adaptability, all necessary in today’s environment.
  • TrackX Verify, a solution that serves as a platform of proof for all supply chain related activity and transactions by recording immutable digital transactions and events in a secure blockchain-based registry.  TrackX Verify serves as the data distribution hub, enabling pertinent supply chain information to be easily accessed and utilized by the entire partner ecosystem simultaneously, resulting in new levels of transparency, trust and collaboration than had been previously attainable.
  • TrackX ESG, automates performance analytics and reporting capabilities that customers use to monitor, measure and prove progress against ESG and other sustainability standards.

As companies emerge from the impact of the most recent pandemic, it will be vital for companies in the supply chain ecosystem to prioritize sustainability as a strategic initiative and be equipped with the tools, technologies and resources to navigate disruptions. Consumers are demanding product tracing and tracking, better identity of origin, product authenticity, chain of custody, and proof environmental, social and compliance (ESG) behaviors. Keychain enables the digital supply chain and represents one of the only full-cycle supply chain execution platforms with the ability to scale and cater to a global market and enterprise accounts in the areas of tracing, tracking and sustainability. With this as its primary solution focus, TrackX expects to see an increase in pipeline activity and new revenue opportunities throughout 2021.

About Track

TrackX, Inc. (TSX.V: TKX), based in Denver, Colorado, is the SaaS-based enterprise tracing, tracking & collaboration solution that leading brands trust to achieve more sustainable and better performing supply chains. TrackX solutions are built on an enterprise scalable and fully customizable platform that leverages a broad array of RFID, IoT (Internet of Things) and Sensor Technologies to provide item level visibility to customers across a broad array of industries, including food, beverage, brewery, automotive, retail, financial services, technology and government. For more information, visit www.trackx.com.

Media Contact

Tim Harvie, TrackX Holdings Inc.
investor@trackx.com
303-325-7300

Neither TSX Venture Exchange nor its Regulations Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain “forward-looking statements” under applicable Canadian securities legislation. Forward looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. All statements that address future plans, activities, events or developments that the Company believes, expects or anticipates will or may occur including the Company’s anticipated pipeline and value of current and customer deployments and future opportunities are the managements best estimates and cannot be guaranteed or relied upon and is forward-looking information.  There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company disclaims any intention or obligation to update or revise any forward-looking statements in this news release, whether as a result of new information, future events or otherwise, except as required by law

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